Non-QM Market Expanding Significantly in 2025

According to financial experts, demand for non-traditional loans has grown rapidly alongside shifts in the economy as a whole. Since these widespread changes to the global economy are only likely to become more prevalent, S&P Global believes that non-QM loans might explode in the near future and make up a whopping 30% of non-agency mortgage-backed securities.

In 2024, about one in 20 (or 5%) of total loan originations came from the non-QM sector. While that might seem like a small number, it’s a drastic increase from previous years and shows a steady rise in non-QM loan demand.

More borrowers and looking at non-QM loans as a viable option because they offer something that traditional lenders could never – practical solutions that fit unique circumstances and don’t require lenders to conform to strict standards. Non-QM loans are flexible and fill the gaps of hopeful borrowers left out by traditional loan standards.

Many borrowers are seeking out these types of non-traditional loans due to circumstances beyond their control. For instance, the last five years have been rough in the global economy. From massive industry shifts to pandemic-induced changes to different businesses, many individuals have had to pivot into non-traditional situations.

Self-employed individuals, for instance, might struggle to get a traditional loan without a W-2 or consistent, provable income. Since the economic turbulence has caused so many more Americans to become self-employed or adopt a side hustle, many of those individuals have had to turn to non-QM lenders to fund their goals.

Another growing population that tends to need non-QM lenders is retirees. These groups don’t have a stable income, but they might have plenty of savings to be able to continue paying on a loan. Real estate investors are another group of individuals who often struggle to prove they have a reliable enough income to be a good candidate for a loan.

Foreign nationals who have not yet built up a U.S.-based credit history can also benefit from non-QM loan options.

Are You Looking for a Non-Traditional Lender to Work With?

With a non-QM lender, self-employed individuals or those with a non-traditional stream of income can still apply for a loan using proof like bank statements. Retirees can utilize asset depletion programs to verify they qualify for a loan even without a steady stream of income. International borrowers can also use proof of their foreign income or international credit reference to show their trustworthiness.

On top of these perks, non-QM loans can also be attractive for borrowers looking for high-dollar loans. Some jumbo non-QM lenders offer financing up to $3M, for example.

Non-QM loans are also usually more streamlined, faster to obtain approval for, and more customizable.

Do you want to find out more about your non-QM home loan options? Get a fast and accurate estimate using our interactive online menu to find out exactly what our team here at Non-QM Home Loans can offer. If you’d prefer, then you can also call us directly at (800) 413-0240.